I used to be a hardcore MMM fan/evangelist, but recently I've stepped out of the cult to simply be a casual fan.
MMM has MANY young people on his forum drinking the 4% SWR kook-aid without realizing what exactly is in the brew, and convinced with unshakable faith that anyone can retire on 4% in their 30s on a budget of $12k-$15k/year, and many are locked in on doing just that. But what MMM (and even MMM's wife) have failed in is abusing the 4%SWR references.
I think the "fine print" of his philosophy is that 4% makes sense
in conjunction with super-low annual expenses; a side or hobby job to create extra income; and a willingness to DIY/insource every issue that comes up. Consider that a couple could relatively easily clear $25k/year flipping burgers. So even after major paper portfolio losses, it's "easy" to support one's lifestyle. He has whole posts dedicated to "the power of outrageous optimism" and "jobs that pay over $50k without a college degree". He's commented multiple times that it's
just so easy to make money in
his version of retirement.
And he definitely has his own version of
retirement; I think dallas27 described it best earlier in this thread with the "Stage 1" definition:
Stage 1 - "I have the money to stay alive and sheltered, - Not set for life mind you, just have that minimum egg that will keep me off the streets and eating ramen noodle if life throws me a curve that I can't recover from.
MMM isn't living exclusively off his portfolio, and from what he's revealed, he's
always had enough non-portfolio income to cover his living expenses. If you disagree with his definition of retirement, you get branded as part of the Internet Retirement Police or a Complainypants.
More power to him that he's happily living the life he wants and making good money off his hobbies. Not everyone has hobbies that are profitable, and at least to me, the whole point of retirement is to not have to worry about making money.
it doesn't matter how resourceful you are, as you are just 1 health issue away from a potentially MAJOR derailment of your entire retirement plans. Not to mention a plethora of other possible things that could happen to such a tiny budget (car accidents, stuff needing fixed around the house, car maintenance, the list goes on and on).
Apparently bike riding is the secret to complete illness avoidance. The cost of health insurance/healthcare always comes up in the comments, and maybe it's just me, but I feel like he always cites biking as his family's means to complete health catastrophe avoidance. Car accidents? Well, hard to get in car accidents if you only drive two tanks' worth of gas per year. Stuff needing fixed around the house/maintenance? DIY is the answer to that. (There's just a
slight bit of sarcasm in this paragraph, if it's not obvious.)
With regard to MMM crankiness or arrogance, that's just part of his shtick. He's been on a number of podcasts, and freely admits that he's actually a mild-mannered programmer-type. It's definitely been successful at getting people talking about him and his ideas.
IIRC, I read once that
Mr. Money Mustache is really his super-hero alter-ego personality; as opposed to
Pete, the actual real-live person. Sometimes I think he blurs the line a bit between MMM and Pete, but I find that if I keep that deliberate-split-personality idea in mind, then the "facepunches" and other holier-than-thou comments are indeed just shtick, and easier to digest. My impression is that he often takes off the MMM "hat" in the comments section, and the mild-mannered Pete tends to come through somewhat.
I think the main problem with his SWR advice is that he's really only semi-retired.
Totally agree, although he would label you "Internet Retirement Police" for making that comment.
His wife posted a while back about visiting her parents, and starting to feel increasingly anxious as they drove around town to a movie and then for dinner. All because of the wastefulness of using a car for those errands. That seems waaaaaaay overboard to me.
Yes, that was their "terrifying" trip to Dairy Queen. There was another article that gave me the impression that they might deliberately live in borderline squalor. He talked about showering only "when needed", maxing out at every other day. The comments got into a series of one-ups, each person subsequently bragging about how little they showered. One guy suggested a "Navy shower": briefly run cold water to wet down your body, turn water off to lather up, then turn cold water again only long enough to rinse. (And even
that might be a bit excessive, you really only need to wash key parts of your body.) Can't argue with the green aspects of living like this, and obviously it's necessary somewhere like a submarine. But this is kind of the crux of my frustration with him, he's drawn this arbitrary line between good and bad, where good is doing like him or more extreme, and any less is bad.
His particular spend rate and environmental footprint is the new standard; it's where maximum happiness is achieved, and anything beyond that is mindless consumer hedonism. This is true for all people and all personality types. If you disagree, you're just a complainypants.
I know a lot of people with young children... For most of these people, the boundaries of cost cutting are determined by children. If you have a boy and a girl, you need 3 bedrooms, no matter that there were plenty of mixed gender children raised in Colonial homes with a lot fewer than 3 bedrooms. Every world has legal and social expectations that are usually best observed.
I have two young children, and this is what prevents me from retiring
super early to live exclusively off my portfolio. I might be willing to take the risk if I didn't have kids.
Then we get to school. When I started high school in a big city school that drew from very mixed neighborhoods, both I and my parents realized immediately that this was not a cool idea. This was 50+ years ago, and it has only gotten worse...
I agree with you, but I think MMM would say that you suffer from "Ivy League Preschool Syndrome". He had an earlier post with that exact title IIRC, but has recently back-pedaled a bit, acknowledging that the public schools in his area are inadequate for his son. Now they are homeschooling.
I respect cost cutting, I have always been cheap, but looking around I think that perhaps non-parents or those with grown children can get out of touch. I have a friend who bought a rundown 50s sfh in Bellevue at the time of her divorce. She successfully raised a son who is very well employed as a software developer, by seeing to it that he attended good schools that she qualified him for my living where she did, and the UW, a reasonable quality reasonable price state flagship school here.
The children aspect is one thing I find particularly irksome about MMM. He has a son, who he describes as a "creative introvert". What that means is that he's happy to stay at home and find ways to entertain himself without spending any money. Now there's a nature versus nurture scenario to debate! But the point is, MMM seems to fail acknowledge that different kids have different interests/personalities, and some of those require money to be spent and transportation out of the range of biking. He recently critiqued a family that had crazy-busy weekends do to their kids' numerous activities. Easy for him to point fingers, when by his own admission, his son only wants to hang out at home.
Despite all my criticisms, I think he's a force for good. One of his fundamental tenets is to separate money from happiness; happiness comes from within, from friendships and growth, from learning and challenges; but
not from spending money. I certainly like to be reminded to "stop and smell the flowers", and at the risk of being presumptuous, I think many people could as well.
